Search results for "terms of trade"
showing 10 items of 18 documents
A global perspective on effectiveness of aid for trade
2013
Recent global initiatives on debt relief and development assistance call for increasing aid for trade to the poorest countries. The paper applies a multi-country computable general equilibrium model to measure the effectiveness of alternative aid for trade categories. The findings show that aid for trade policies expand trade and alleviate international income inequalities in the recipient countries, that will benefit mainly from aid for trade adjustment and technical assistance.
ASSESSMENT OF TOURISM COMPETITIVENESS BY ANALYSING DESTINATION EFFICIENCY
2008
The notion and measurement of destination competitiveness have received increasing attention in the economics literature on tourism. The reason for this emerges from both the growing economic importance of the tourist sector and the increasing competition in the tourist market resulting from the transition from mass tourism to a new age of tourism that calls for a tailor-made approach to the specific attitudes and needs of tourists. The central subject of this paper – inspired by the conceptual competitiveness model developed by Crouch and Ritchie – concerns the efficiency of tourist site destinations. Using a data set of 103 Italian regions for 2001, an economic efficiency analysis is car…
Trade in final goods and the impact of innovation
2011
Abstract This paper analyses how innovations in imported final goods impact via terms of trade effects upon welfare growth in the domestic economy. It is shown that the impacts, although differing across countries, are quantitatively significant and worthy of further consideration.
Do Multinationals Deteriorate Developing Countries' Export Prices? The Impact of FDI on Net Barter Terms of Trade
2015
This paper explores the economic relationship between foreign direct investment (FDI) to developing countries and the export prices of the latter, measured by terms of trade. It is rst shown that economic theory suggests such a relationship for various reasons but is inconclusive about the direction of the eect. To address this open issue empirically, I analyze data on more than 50 developing countries throughout the period 1980 - 2008 using robust dynamic panel data methods. The results show that FDI had an economically relevant and statistically signicant positive impact on developing countries’ net barter terms of trade. A higher level of education in the developing country fosters this …
The real exchange rate in the long run: Balassa-Samuelson effects reconsidered
2017
Historical data for over hundred years and 14 countries is used to estimate the long-run effect of productivity on the real exchange rate. We find large variations in the productivity effect across four distinct monetary regimes in the sample period. Although the traditional Balassa-Samuelson model is not consistent with these results, we suggest an explanation of the results in terms of contemporary variants of the model that incorporate the terms of trade mechanism. Specifically we argue that changes in trade costs over time may affect the impact of productivity on the real exchange rate over time. We undertake simulations of the modern versions of the Balassa-Samuelson model to show that…
The Equilibrium Real Exchange Rate of Germany
1997
The NATREX model defines the fundamental determinants of the equilibrium real effective exchange rate in the medium to longer run. The PPP theory is a special case of the NATREX when a linear combination of the fundamentals, which are productivity and social thrift, is stationary. The differences in social thrift under Schmidt and Kohl, and the effects of the European terms of trade upon the q-ratio, explain the variations in the NATREX in the preunification period. The actual real exchange rate of the German mark converged to the NATREX. In the postunification period, the medium run NATREX increased due to the rise in time preference and the cyclically adjusted q-ratio. The actual real exc…
Desertions in nineteenth-century shipping: modelling quit behaviour
2013
Ship jumping in foreign ports was widespread throughout the age of sail. Desertion by seamen was illegal, it occurred abroad, and men who deserted only seldom returned home. We analyse desertion quantitatively and link it to the broader question of quit behaviour and labour turnover. Though the better wages paid at the foreign ports were the main reason for desertion, the regression model of the determinants of desertion indicates that outside opportunities, such as migration, and monetary incentives played a significant role in the nineteenth-century labour market, characterized by rather strict control over labour supply, working conditions, and terms of trade. Copyright , Oxford Universi…
Assessing commodity price risks and terms of trade exposures in emerging and developing countries
2020
This paper provides novel evidence on commodity exposure (impacts of commodity price and terms of trade fluctuations) amongst 46 emerging and developing countries (EMDCs) in Africa, Asia and the Latin American and Caribbean (LAC) region. We focus on the exposures of six macroeconomic variables to the commodity prices and terms of trade, based on the real business cycle (RBC) theory. Our empirical results indicate that, overall, about 10% of the macroeconomic variation amongst the EMDCs is due to commodity market-related exposures. The Asian and LAC economies are especially sensitive to changes in commodity prices. The changes in the prices of world trade have an imminent impact on non-commo…
Terms of trade, catch-up, and home-market effect: The example of Japan
2007
Abstract This paper explores theoretically and empirically the medium- and long-run relation of the terms of trade (ratio of traded goods prices) and economic growth of a pair of countries—one of which experiences a major catch-up process towards the other. Two theoretical interdependencies between the terms of trade and economic growth are offered: the home-market effect and the productivity-shock effect. These two effects are tested against each other in a cointegration analysis on data for Japan and the US from 1971 until 1997. Income is cointegrated with the terms of trade. The relevant empirical channel is the home-market effect. However, financial-market effects appear also to be rele…
On Subsidies in Trade Agreements
2008
When terms of trade externalities are the only source of cross-border inefficiencies, trade negotiators must negotiate market access only. Based on this principle, Bagwell and Staiger (2006) argue against the WTO subsidy rules. The present paper shows that their argument fails when trade agreements are required to be self-enforceable. By affecting output, subsidies impact the self-enforcement constraints, which, in turn, determine the policies of trade agreements. Consequently, trade agreements must include subsidy rules. In realistic scenarios, banning production subsidies is efficient while negotiating market access only is inefficient. In this sense, this paper makes a strong case for th…